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The 8 Ways Urban Demographics are Changing

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The 8 Ways Urban Demographics are Changing

The 8 Ways Urban Demographics are Changing

Cities are what keep the global economic machine humming.

Over 80% of the world’s economic output is derived from activities in cities – and more specifically, it’s estimated that 60% of GDP growth occurs in just the top 600 urban centers.

Given the above, it’s fair to say that the destiny of humankind is directly linked to what happens in major cities. Further, how urbanization plays out over time could end up having a significant ripple effect on the economy, and we should pay close attention to such trends.

Urbanization 2.0

Today’s infographic comes to us from Raconteur, and it showcases eight different ways that urban demographics are evolving.

Below we will summarize the changes, along with potential impacts on the economy:

1. A Higher Percentage of Urban Dwellers

Between 1950 and 2018, we went from 30% to 55% of the world’s population living in cities. This has been driven largely by today’s middle and high income economies in places like North America, South America, Europe, and Japan.

The next stage of urbanization will see us move to 68% – more than two-thirds of the world’s population – living in these urban conglomerations. It will be driven by countries in developing markets, creating a potent investing megatrend along the way.

2. The Countries Driving Growth

It’s estimated that three countries will combine for 35% of all urban population growth.

RankCountryGrowth in Urban Population (2018-2050)% of Global Urban Growth
#1India416 million people17%
#2China255 million people10%
#3Nigeria189 million people8%
World860 million people35%

In total, there will be 2.5 billion more urban dwellers in 2050 than there are today. Many of these people will experience rising incomes in cities, increasing the global middle class to an unprecedented size.

3. Peaking Rural Populations

On the flipside, it appears the world’s rural population has nearly flatlined, with anticipation that it will peak in absolute terms in the next couple of years. Rural populations have been slowly growing since 1950 until this point.

4. The Rise of Megacities

There will be 43 megacities by the year 2050, which is more than quadruple the amount that existed back in 1950.

The changing geography of the world’s megacities will be one of the major forces that shapes the future of the global economy and accompanying investment trends.

5. New Population Centers

By 2050, more than 70% of the world’s urban population will live in Asia or Africa. Meanwhile, North America and Europe will combine for closer to 15% of that total.

6. De-Urbanization

The role of de-urbanization is often downplayed or forgot about when discussing urban demographics, but it is an interesting issue.

Factors such as falling fertility rates, economic contraction, and natural disasters are actually shrinking the size of some cities. In fact, McKinsey predicts that 17% of cities in developed regions will see a drop in population between 2015-2025.

7. Disparities in Urban Growth

The rate for urban population growth is actually trending down across all types of economies – however, these rates come from very different starting points.

High income countries are currently averaging growth of less than 1% per year, and this will continue to decline to below 0.5% per year by 2050. Over the same time period, low income nations will go from 4% to 3% per year.

8. Changes in Average Age

The age distributions in large cities within developed nations will begin to skew older, something we’ve shown previously when looking at the median age of every continent.

The biggest impact here may be felt on dependency ratios in the workforce. With a smaller pipeline of new workforce entrants and a burgeoning population of seniors, this changing ratio is one of the most significant stories impacting urban demographics.

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Chart of the Week

Ranked: The 10 Most Expensive Cities in the World

From Osaka to New York, we look at a global ranking of the 10 most expensive cities, and how those rankings have changed over the last year.

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The Most Expensive Cities in the World

Where personal wealth is concerned, there are two sides to every story.

The first of which is the amount of money a person earns, and the other is what they choose to spend their money on. The latter is influenced by the cost of living in the city where they reside—an ever-changing metric that is driven by a wide variety of factors, such as currency, population growth, or external market movements.

Today’s graphic visualizes the findings from the 2020 Worldwide Cost of Living report and uses data from 133 cities to rank the most expensive cities in the world.

Note: Report research was conducted towards the end of 2019, before the COVID-19 outbreak.

Asia Dominates the Ranking

Globally, the cost of living has fallen by an average of 4% over the last year, with much of the movement up and down the ranking being driven by currency fluctuations.

The locations with the highest cost of living are largely split between Europe and Asia. For the second time in the report’s 30-year history, three cities are tied as the top spot—Singapore, Hong Kong, and Osaka.

RankCountryCityIndex Score (New York=100)Rank Movement
#1(t)🇸🇬 SingaporeSingapore1020
#1(t)🇨🇳 ChinaHong Kong1020
#1(t)🇯🇵 JapanOsaka1024
#4🇺🇸 United StatesNew York1003
#5(t)🇫🇷 FranceParis99-4
#5(t)🇨🇭 SwitzerlandZurich99-1
#7🇮🇱 IsraelTel Aviv973
#8(t)🇺🇸 United StatesLos Angeles962
#8(t)🇯🇵 JapanTokyo965
#10🇨🇭 SwitzerlandGeneva95-5

Source: EIU. New York City is index baseline (score = 100). Ties in index score values are denoted by (t).

Osaka is a newcomer to the top spot, climbing four places over the last year to join cost of living heavyweight champions, Singapore and Hong Kong. As Japan’s third-largest city, Osaka is a major financial hub and a breeding ground for emerging startups, with relatively low real estate costs compared to Singapore and Hong Kong.

Three European cities (Paris, Zurich, and Geneva) sit atop the most expensive city rankings, compared to seven cities only 10 years ago. Similarly, 31 of the 37 European cities have seen a decrease in cost of living overall—largely as a result of the Euro or local currencies losing value relative to the U.S. dollar.

Finally, the top 10 is rounded out with two cities from the United States (New York, Los Angeles) and one from Israel (Tel Aviv).

The Cheapest Cities

While East Asia is home to many of the world’s most expensive cities, South Asia hosts the largest grouping of cities with the lowest cost of living.

RankCountryCityIndex Score (New York=100)Rank Movement
#133🇸🇾 SyriaDamascus25-1
#132🇺🇿 UzbekistanTashkent30-1
#131🇰🇿 KazakhstanAlmaty34-1
#129(t)🇦🇷 ArgentinaBuenos Aires35-4
#129(t)🇵🇰 PakistanKarachi35-2
#128🇻🇪 VenezuelaCaracas365
#127🇿🇲 ZambiaLusaka38-13
#126🇮🇳 IndiaChennai39-1
#125🇮🇳 IndiaBangalore404
#122(t)🇮🇳 IndiaNew Delhi421

Source: EIU. New York City is index baseline (score = 100). Ties in index score values are denoted by (t).

Three Indian cities dominate the cheapest cities ranking due to a combination of low wages and high levels of income inequality, preventing any price increases.

Meanwhile, political and economic turmoil is a common denominator among the cheapest cities outside of South Asia. For example, the Syrian Civil War resulted in an economic collapse, leading to high inflation and a downward spiral in value for the Syrian pound.

A Spanner in the Works

The COVID-19 pandemic is estimated to cost the global economy up to $2 trillion in 2020, so while governments attempt to boost the economy, many are concerned about higher inflation rates spreading across the world.

With a recession becoming more likely, uncertainty around real estate prices will heighten for every city, regardless of their cost of living ranking.

As we navigate chaotic and uncertain times, the next cost of living survey could look very different to today—the most important question will be how permanent the damaging effects of the pandemic will be.

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Cities

Visualizing the Footprint of Highways in American Cities

Highways improved mobility for the average American, ingraining the automobile into the urban fabric of American cities, for better and worse.

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The Impact of Highways

Footprint of Highways in American Cities

Visualizing the Footprint of Highways in American Cities

Driving on the open road is a defining feature of the American experience, made possible by coast-to-coast highways. It defined a generation of life and ingrained the automobile into the urban fabric of American cities, for better and worse.

Today’s animations show how highways reshaped the downtown cores of six American cities and created new patterns of urban life. But first, some background information on the creation of the interstate system.

The Interstate Highway System

The U.S. Interstate System was created on June 29, 1956, when Dwight Eisenhower signed the Federal-Aid Highway Act. It would eventually run 46,876 miles, cost $521 billion and take 36 years to complete.

Map of the US Interstate System

From San Diego to Bangor, the interstate highway system connected Americans and opened up the country to commerce and geographic mobility like never before, but for all its benefits, this new transportation network ripped through established patterns of urban and town life, creating a new era of urban development.

The Legacy of Highways: The Suburbs and Inner Cities

The vast geography of continental America helped to entrench personal mobility and freedom into American society. Highways and automobiles accelerated this lifestyle and even changed the shape of entire cities.

According to Prof. Nathaniel Baum-Snow of the University of Toronto, between 1950 and 1990, the population of central cities in the U.S. declined by 17% despite a population growth of 72% in larger metropolitan areas during the same period. Baum-Snow posits that, had the interstate highway system not been built, central cities’ populations would have increased 8%.

Firms followed the workers to the suburbs, but the highways system also created additional benefits for these firms. Cross-country road access freed manufacturing from ports and downtown rail hubs, while allowing economies to operate across larger distances, altering the dynamics of typical urban economies.

Faced with this new reality, inner cities struggled in years to come.

Inner Cities

The introduction of highways created an increase in the supply of land for development through faster commutes to outlying areas. In 1950, half of all jobs were located in central cities. By 1990, less than one-third of urban jobs were located in the core of American cities.

“Not TV or illegal drugs but the automobile has been the chief destroyer of American communities.” Jane Jacobs, Author The Death and Life of Great American Cities

Benefits of new development accrued to the outer areas while the construction of the highways in inner cities displaced largely low-income communities, segregated neighborhoods, increased the amount of air and noise pollution, devalued surrounding properties, and removed access to jobs for those without a car, further concentrating poverty.

Before and After: Six American Cities

A bird’s eye view of six American cities reveals what was and what is now. By overlaying existing highways over the neighborhoods they replaced, it becomes clear how much interstate construction drastically altered America’s urban landscape.

Oakland
Public opposition to the construction of I-980 was so strong that developers abandoned the project in 1971, only to complete it over a decade later.

Miami Highway
The I-95 carved through Miami’s largely black Overtown neighborhood. The construction of a single highway cloverleaf resulted in 20 square blocks being demolished, displacing over 10,000 people in that community.

Providence Highway
The I-95 comprised unconnected segments between 1957 and 1965 through the densest urban areas in a deliberate effort to prevent premature suburbanization and to revitalize the downtown core.

Cincinnati Highway
The I-71 cuts downtown Cincinnati off from its waterfront and a massive freeway interchange forced the destruction of dozens of blocks west of downtown.

Detroit highway construction
Freeway construction transformed Detroit between 1951 and 2010. Previously, its downtown had been surrounded by a high-density street grid. Today, it’s totally encircled by freeways.

Rochester Highway
Rochester is one of many cities opting to undertake freeway removal projects.

As the dotted line above shows, the “moat” surrounding downtown is slowly being removed. The city used reclaimed land from the Inner Loop freeway to construct three mixed-use developments that include below-market-rate units.

The Future of Urban Living: Do Highways Matter?

A new era of living is reconsidering the impacts of these highways on urban centers. As property values rise and existing housing stock is pressured, there are growing concerns over the environmental impacts of suburban life. As a result, urban planners and residents are looking to revitalize city cores and re-purpose land occupied by burdensome slabs of highway concrete.

Since 1987, there have been more than 20 urban highway segments removed from downtown cores, neighborhoods and waterfronts, mostly in North America. The pace of removals has picked up significantly and an additional 10 highways are now planned for removal in the United States.

During the COVID-19 pandemic, American cities have seen their traffic plummet. Rush-hour trips into cities are taking nearly half the time while some are not even commuting at all.

While this situation is likely temporary, it is offering a moment for reflection of how cities operate and whether the car should be at the center of urban planning.

*Hat tip to Shane Hampton, whose 60 Years of Urban Change compilation served as inspiration for this article. Visit that page for many more examples of highway impact on cities.

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